Silver Price Prediction – Prices Drop Following Strong Jobs Data

Silver prices declined sharply on Friday following the Department of Labor unemployment report. The large than expected number buoy the dollar moved higher, putting downward pressure on the entire precious metals complex. U.S. Treasury yields rose, with putting upward pressure on the greenback, which in turn weighed on silver prices.

Technical analysis

Silver prices tumbled sharply, breaking through the July lows. Target support is seen near the June lows at 1,750. Resistance is seen near former support at an upward sloping trend line near 1,789. Additional resistance is near the 20-day moving average at 25.40. Short-term momentum has turned negative as the fast stochastic generated crossover sell signal.  Medium-term momentum has turned negative as the MACD (moving average convergence divergence) generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

The Unemployment Rate Drops to a Pandemic Level Low

According to the Labor Department, the unemployment rate dropped to 5.4% as non-farm payrolls rose more than expected. The headline unemployment rate of 5.7%. The drop in the headline unemployment rate looked even more vital considering that the labor force participation rate ticked up to 61.7%. Average hourly earnings also increased more than expected, rising 0.4% for the month and are up 4% from the same period a year ago, at a time when concerns are increasing about persistent inflationary pressures.